You may be in the camp of not knowing what expired listings are, wanting to find out how to use them for lead generation purposes, or entering this real estate niche.
No matter where you are, they can be a great opportunity, and this article will provide you with all you need to know about them.
It will cover…
- How expired listings work and why they expire
- Whether most expired listings do not sell
- How to market an expired listing
- How to get expired listings with 5 strategies and ideas
- How to follow up with them
- What to include in an expired listing packet
- Final thoughts and whether they are worth it
The Basics of Expired Listings
Let’s get the basics out of the way before diving into the different aspects of expired listings.
How Expired Listings Work and Why Listings Expire
In my article about how to write an expired listing letter, I covered how expired listings work.
The essential element of a listing is the tie a seller has with a real estate agent.
A listing contract was signed, and when the real estate agent puts a property on the MLS, it becomes a listing.
Now, from where I come from, and likely you do too, contracts usually have a contract period.
This is also true for listing contracts.
If the property doesn’t sell by the end of this contract period, it becomes an expired listing.
As stated in my article above, this often results in a frustrated or disappointed seller.
Let’s keep this seller’s emotion in mind for later.
These are some of the common reasons why listings can expire:
- Unreasonable sellers (e.g., overpricing their homes)
- Sellers with enough marketing knowledge to be “dangerous.”
- A property in bad condition because an owner is not doing the necessary remodeling or maintenance work
- Bad marketing, promotion, and real lead generation on behalf of the real estate agent
- Buyers are not getting loan approval, which is finally a lead-qualification issue.
- The seller did not want to become a house owner but stayed a homeowner. So no depersonalization of the property was done; thus, potential buyers couldn’t see themselves living in the house.
Do Most Expired Listings Not Sell?
Indeed, 15 to 25% of listings do not sell according to this statistic, and close to 40% will be listed with a new agent within 30 days (source).
Only a minority (28%) of the homeowners of expired listings will relist them with the current agent (source).
Why is that?
Although it can be the homeowner’s mistake (e.g., being inflexible with the suggested price), it is easier to use real estate agents as scapegoats even if they may have done everything else right regarding marketing the listing.
So, the following conditions need to happen for an expired listing to not sell:
- Sellers’ superficial marketing knowledge, assuming they can market and sell them on their own at a lower price (that’s many FSBOs)
- The seller is still not doing the necessary maintenance and remodeling work.
- The property keeps being offered overpriced.
- The seller still doesn’t depersonalize the home.
Summarized, you could say if the seller doesn’t manage to adapt to the feedback from the market (“Hey, lower your price, finally repair your roof, and get rid of the toothpaste in the bathrooms…”), the expired listing will not sell in the future.
Then again, if the contrary happens, expired listings can still sell.
So you can’t generally say that most expired listings don’t sell.
How to Market an Expired Real Estate Listing?
You may suspect that a real estate agent relisting a formerly expired listing and a seller not wanting to work with an agent could ask this question from the above.
The main goal is to generate serious and, thus, qualified buyer leads.
But before I provide you with the methods, you need to find out why the listing expired in the first place.
While you can sell crappy products (for a while) with outstanding marketing (easier to do with low-price tag products in a less transparent market), this is another story in the transparent U.S. real estate market.
So, before you start to market the property again, you want to identify and fix the root causes of the listing expiring.
It means you may need to have the owner…
- Lower the price
- Depersonalize the property, additionally doing some home staging and taking new photos
- Doing important repairs
By the way, you ideally had checked these boxes already before you signed a listing contract with the owner.
It should be part of your seller qualification process.
If not, you may run into the same issues the former real estate agent did, which made the listing expire in the first place.
And if it really was a marketing issue, you may need to identify the issues there and ask questions such as…
- Was the right buyer group targeted with the right message and through the right marketing channels?
- Was the correct marketing budget used based on the number of leads required to close a sale?
- How skilled or experienced was the former real estate agent with the marketing channels used?
So, there are eight possible root cause cases you could analyze:
- The price was set correctly, the property was ready to sell, and marketing was bad (here, the issue was likely the realtor).
- The price was set correctly, the property was not ready to sell, and marketing was bad (here, the issue was the realtor and the seller).
- The price was set correctly, the property was ready to sell, and marketing was good (here, the issue was likely the buyer who, in the end, didn’t qualify for a loan, so it may have been the realtor not qualifying potential buyers well enough).
- The price was set correctly, the property was not ready to sell, and marketing was good (here, the issue was likely the seller).
- The price was not set correctly, the property was ready to sell, and marketing was bad (here, again, the issue was likely with the realtor and the seller).
- The price was not set correctly, the property was not ready to sell, and marketing was bad (the worst case, but also a great opportunity).
- The price was not set correctly, the property was ready to sell, and marketing was good (here, it could have been the realtor not doing a good job in valuing the property or the seller not wanting to lower the price).
- The price was not set correctly, the property was not ready to sell, and the marketing was good (similar to case number 7).
If you identified the wrong marketing as the main issue, you want to look into buyer lead generation methods.
I wrote this article about it, and you will need to develop a marketing plan (my article).
In short, you want to…
- Determine your buyer lead generation goals and constraints (budget, time, skills, experience, etc.).
- Identify the ideal buyer for the property, ideally warm to hot ones (see my article about different real estate lead types here).
- Determine the marketing channels you want to use based on the prior two points (e.g., paid and “free” outbound, paid and “free” inbound, referral lead generation, and, or database marketing).
Getting Expired Listings: 5 Strategies & Ideas for Decent Seller Leads
It may also be that you don’t have an expired listing for relisting yet.
So, you may also wonder why dealing with expired listings in the first place.
The answer is that focusing on this real estate niche with your real estate marketing can present you with a good opportunity to generate motivated but often a bit frustrated and disappointed seller leads (see the reasons above).
So, this section will dive into different ways to get expired listings.
Generally, the same applies to getting expired listings than to seller lead generation in general (read my article about it here).
The only difference is that we already know the real estate niche: sellers of expired listings.
Since expired listing leads are usually warm or hot leads (motivated sellers), you want to use lead generation methods that align with this lead type, primarily outbound lead generation, such as…
Except for PPC Ads on search, you can use the sources below to find contact information about expired listings to start your outbound lead generation campaign, such as direct mailing or cold calling.
- Identifying expired listings via your MLS by searching for listings due to expire soon (e.g., a few weeks or less than a month)
- Checking public records (this is often time-consuming)
- Partnering with other real estate agents and brokerages (this and this article goes more in-depth into these topics)
- Buying expired listing contact information via Redx, Mashvisor, Vulcan 7, and/or Espresso Agent.
Calling Expired Listings (Should You Call Them In The First Place?)
From what you read above, you may also wonder whether you should call expired listings in the first place.
I know where you are coming from with this question.
It can be a bit “scary” or intimidating to call expired listings when you know you will likely encounter a frustrated and disappointed seller.
However, if you consider their comments as just another objection you may come across anyways when cold calling other potential sellers, you can relativize this hesitation.
It’s just cold calling with all its downsides you must live with anyways when doing this outbound lead generation method.
And with an average conversion rate for meetings or appointments of 2%, the conversion numbers aren’t too bad, as I already worked out in this article.
What to Say When Calling Expired Listings? (To Script or Not to Script to Win Them Over)
Okay, you are decided and want to start calling expired listings.
But now, what do you say?
This opens a different can of worms.
It’s the switch between generating leads and then converting them into clients.
People write books about this topic and give expensive seminars and training.
It’s called sales, in our case, selling over the phone.
And the question here is not what to say but how to converse.
The goal, however, is to persuade the seller to work with you as an agent and sign a listing contract.
Just “saying” something and winning the expired listing over would imply you just call the seller and read a script out loud.
Then, by some magic, the seller signs your listing agreement.
Well, that’s not real life, and there are two schools of thought: one in favor of scripts and the other avoiding scripts at all costs.
I also covered this controversy in my article about cold calling here.
And I concluded that scripts can help, but they should be like the support wheel on a kids’ bike, hence temporary until you can ride without it.
Because, with all the telemarketers and robocalls nowadays, people can smell someone reading a script from a mile away.
5 Typical Objections of Expired Listings
In my article about how to write an expired listing letter, I also covered objections you can anticipate and handle in the letter.
Typically, during your cold calling sessions, you will encounter these seller objections when dealing with expired listings.
First, these objections will come from the seller’s disappointing experience with the former real estate agent.
Still, they may also come from their general worldview. You could derive them already from the reasons why expired listings occur above.
The seller may not generally like realtors and think they are all the same.
Sellers think they have enough marketing skills and market knowledge to sell on their own.
From these opinions, the seller of an expired listing could say the following as objections:
- “No way I reduce the price any further. I already lowered it a few times, and I don’t want to make it appear less worthy than it is.”
- “We have time. So, if the property couldn’t sell before, it’s because there wasn’t the right buyer yet. We’ll just wait for the right one.”
- “We don’t accept any low ballers. We’ve already invested a lot of time and money into our home.”
- “I think that with the current market conditions, we can get more for our home.”
- “What makes you think you are different from the other agent we had who didn’t manage to sell our house?”
Do Letters to Expired Listings Work?
I already mentioned this in passing. Another lead generation method to get expired listings is sending direct mail as an expired listing letter.
In this article, I covered this topic in-depth. We can deduce whether expired listing letters work from the same article about direct mail.
If you can check the boxes of the following requirements for an expired listing letter, they will likely work:
- Write them with a specific goal (e.g., an appointment).
- Know the expired listing sellers’ needs, wants, desires, problems, pains, and emotions.
- Based on point 2, communicate the benefits you can offer.
- Know and communicate how you are different from your competition.
- Use all the above in your sales copy for your expired listing letter.
- Include additional persuasive elements (e.g., show differentiators, credibility, etc.)
- Anticipate and handle seller objections in the letter (e.g., the ones mentioned above).
Generally, direct mail, including letters to expired listings, works, considering they usually have a response rate or lead conversion rate of 6%.
You may also want to test the sales copy online before spending too much on mailers, postage, and print materials by split-testing different mailer versions.
This can increase your chances of success.
You can also test the sales copy by sending emails to expired listings (provided you have the email addresses), which leads me to the next section.
What to Email an Expired Listing?
In addition to cold calling or using direct mail for expired listings to convert sellers into your clients, you can also use email.
And what you email to an expired listing isn’t really different from what you send them in an expired listing letter.
The same principles apply.
However, instead of an attention-grabbing mailer that persuades the seller to open it, you will need to write an attention-grabbing subject line.
For additional information about email marketing strategies, you may also want to read my article about this topic here.
How to Follow Up On an Expired Listing?
There is little difference between following up on an expired listing and leads of other real estate niches.
The important thing is that you do this because you can increase your response rates by 90% if you follow up three or more times.
By the way, I covered this topic in this and this article already.
In the latter article, I derived these best practices based on the statistics which also apply to following up on an expired listing:
- Have between 6 and 8 touchpoints.
- Use the phone as the first follow-up channel (ideally, a video call). Be patient if you don’t reach the lead on the first attempt. You may need 8 call attempts.
- After the phone call, switch to texting, and send over 3 text messages.
- Make some touch points via email before and between the texting.
- When using email, include the lead’s name in the subject line and one to three questions.
- Track your expired listing follow-ups in CRM software.
What to Include in an Expired Listing Packet?
Once you get an appointment from a seller, the expired listing packet comes into play.
So, you include the same content as a typical listing presentation (read my article about this topic here).
The only difference is that the messaging is more tailored to the special situation of a disappointed seller of an expired listing.
The same is true when you meet and speak in person with the seller.
So, in this case, you include the following in an expired listing packet:
- A convincing cover letter about why they should work with you and give another realtor (you) a second chance
- A justification of the list price you propose (e.g., a comparative market analysis) and the pricing strategy
- Suggested upgrades, landscaping, fixes, interior upgrades, staging, etc.
- How to handle and negotiate offers from buyers
- The marketing plan for how the property will be marketed
- Testimonials of past clients and your credentials
- The listing agreement
Final Thoughts On Expired Listings
Provided you know what you are getting into (knowing how to address and deal with the seller’s situation, disappointment, etc.) and you pre-qualify them by finding out why their listing expired, expired listings can be good leads.
Why?
Because these leads will be motivated and thus warm or even hot seller leads with a high customer awareness level.
So, working in this real estate niche can be worth it because you won’t have to nurture them as other seller leads for a year or longer until they are ready to consider selling their property.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.
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